After breaking $5, the rise to $9-$12 is happening very quickly. If there is a correction coming before breaking into all-time-highs, in all likelihood it will be there at $9-$12. And there's no telling how sharp the correction could be.

I'll have no sympathy for the panic sellers, but I am concerned about the common bitcoinica user.

From the screenshots people are posting, the interface is very confusing in one obvious respect: the maintenance margin requirement.

Because bitcoinica is missing a "maintenance margin calculator", the user is forced to solve a ridiculous algebraic formula to determine the lowest bitcoin price a position can suffer before you are completely zhoutonged.

With bitcoinica there is the extra complication in that it lets you keep your maintenance margin in bitcoin. This means it shrinks as the price drops, and you will get zhoutonged much quicker than you expect.

I'm probably as bullish as anyone here, but I wouldn't be surprised to see a correction retrace down to as low as $4. Yes, it will definitely bounce back from $4 but only after you have lost everything.

Furthermore, stop-loss and limit orders will not protect you. If the correction is sharp (and it most likely will be), your stop or limit order may not even get executed before you suffer a fatal margin call. Market orders are executed at the market price, which could very well drop instantly to below your zhoutong price. Your limit order to sell before losses only happens if there's a willing buyer, and when there's not it will never even be executed.

Analysts are predicting that $9-$12 will be a major inflection point, and a correction from there will cause many to suffer a forced liquidation.

The top percentile could take everything you have, and it might not even be intentional. If too many people lose too much, $9-$12 could prove to be final top price for bitcoin. The richest will be a lot richer and the majority will just be poorer. It doesn't have to end that way, but it will if we are not smart enough when left to our own devices.

The world thought bitcoin was dead. They thought we had died in a bubble of our own financial illiteracy. The greatest risk to bitcoin is nothing and nobody more than ourselves. Let's prove them wrong.

After breaking $5, the rise to $9-$12 is happening very quickly. If there is a correction coming before breaking into all-time-highs, in all likelihood it will be there at $9-$12. And there's no telling how sharp the correction could be.

I'll have no sympathy for the panic sellers, but I am concerned about the common bitcoinica user.

From the screenshots people are posting, the interface is very confusing in one obvious respect: the maintenance margin requirement.

Because bitcoinica is missing a "maintenance margin calculator", the user is forced to solve a ridiculous algebraic formula to determine the lowest bitcoin price a position can suffer before you are completely zhoutonged.

With bitcoinica there is the extra complication in that it lets you keep your maintenance margin in bitcoin. This means it shrinks as the price drops, and you will get zhoutonged much quicker than you expect.

I'm probably as bullish as anyone here, but I wouldn't be surprised to see a correction retrace down to as low as $4. Yes, it will definitely bounce back from $4 but only after you have lost everything.

Furthermore, stop-loss and limit orders will not protect you. If the correction is sharp (and it most likely will be), your stop or limit order may not even get executed before you suffer a fatal margin call. Market orders are executed at the market price, which could very well drop instantly to below your zhoutong price. Your limit order to sell before losses only happens if there's a willing buyer, and when there's not it will never even be executed.

Analysts are predicting that $9-$12 will be a major inflection point, and a correction from there will cause many to suffer a forced liquidation.

The top percentile could take everything you have, and it might not even be intentional. If too many people lose too much, $9-$12 could prove to be final top price for bitcoin. The richest will be a lot richer and the majority will just be poorer. It doesn't have to end that way, but it will if we are not smart enough when left to our own devices.

The world thought bitcoin was dead. They thought we had died in a bubble of our own financial illiteracy. The greatest risk to bitcoin is nothing and nobody more than ourselves. Let's prove them wrong.

i find it very odd that we haven't heard from Zhou for a coupla days now. and thats despite alot of negative talk besides mine flying around. normally he is out defending vigorously any and all comments that even hint of problems. is he hunkering down for something we're not aware about? this unidirectional move may be causing problems.

After breaking $5, the rise to $9-$12 is happening very quickly. If there is a correction coming before breaking into all-time-highs, in all likelihood it will be there at $9-$12. And there's no telling how sharp the correction could be.

I'll have no sympathy for the panic sellers, but I am concerned about the common bitcoinica user.

From the screenshots people are posting, the interface is very confusing in one obvious respect: the maintenance margin requirement.

Because bitcoinica is missing a "maintenance margin calculator", the user is forced to solve a ridiculous algebraic formula to determine the lowest bitcoin price a position can suffer before you are completely zhoutonged.

With bitcoinica there is the extra complication in that it lets you keep your maintenance margin in bitcoin. This means it shrinks as the price drops, and you will get zhoutonged much quicker than you expect.

I'm probably as bullish as anyone here, but I wouldn't be surprised to see a correction retrace down to as low as $4. Yes, it will definitely bounce back from $4 but only after you have lost everything.

Furthermore, stop-loss and limit orders will not protect you. If the correction is sharp (and it most likely will be), your stop or limit order may not even get executed before you suffer a fatal margin call. Market orders are executed at the market price, which could very well drop instantly to below your zhoutong price. Your limit order to sell before losses only happens if there's a willing buyer, and when there's not it will never even be executed.

Analysts are predicting that $9-$12 will be a major inflection point, and a correction from there will cause many to suffer a forced liquidation.

The top percentile could take everything you have, and it might not even be intentional. If too many people lose too much, $9-$12 could prove to be final top price for bitcoin. The richest will be a lot richer and the majority will just be poorer. It doesn't have to end that way, but it will if we are not smart enough when left to our own devices.

The world thought bitcoin was dead. They thought we had died in a bubble of our own financial illiteracy. The greatest risk to bitcoin is nothing and nobody more than ourselves. Let's prove them wrong.

Please be careful. See you on the upside.

I don't know why, but I see this as adding to the fearmongering masked in kind gesture. No offense. Maybe I should take my tinfoil hat off.

Of course there will be a correction. It happened on the way up to $30, and it will happen this time. There is no escaping the correction. Yes, be very wary of corrections... reduce your leverage and make smaller positions.

But who the hell died and made you the Manipulator? Where are you getting $9-12 from?

i find it very odd that we haven't heard from Zhou for a coupla days now. and thats despite alot of negative talk besides mine flying around. normally he is out defending vigorously any and all comments that even hint of problems. is he hunkering down for something we're not aware about? this unidirectional move may be causing problems.

Yep, this. Hopefully we'll hear from him soon.

Another problem with Bitcoinica is the constant limit Gox puts on them for coupons in USD. It's only a slight annoyance -- if I want to withdraw money from my Bitcoinica account and put it in Gox, I can exchange it for BTC on Bitcoinica and THEN Bitcoinica will issue me a Gox code for BTC with no problem. It's just kind of a hassle, and kind of curious.

i find it very odd that we haven't heard from Zhou for a coupla days now. and thats despite alot of negative talk besides mine flying around. normally he is out defending vigorously any and all comments that even hint of problems. is he hunkering down for something we're not aware about? this unidirectional move may be causing problems.

Yep, this. Hopefully we'll hear from him soon.

Another problem with Bitcoinica is the constant limit Gox puts on them for coupons in USD. It's only a slight annoyance -- if I want to withdraw money from my Bitcoinica account and put it in Gox, I can exchange it for BTC on Bitcoinica and THEN Bitcoinica will issue me a Gox code for BTC with no problem. It's just kind of a hassle, and kind of curious.

but the BitPay guy was complaining that when he did this he had to pay a 5% premium above what he would have if he could used mtgox w/o the limit.

Of course there will be a correction. It happened on the way up to $30, and it will happen this time. There is no escaping the correction. Yes, be very wary of corrections... reduce your leverage and make smaller positions.

But who the hell died and made you the Manipulator? Where are you getting $9-12 from?

i find it very odd that we haven't heard from Zhou for a coupla days now. and thats despite alot of negative talk besides mine flying around. normally he is out defending vigorously any and all comments that even hint of problems. is he hunkering down for something we're not aware about? this unidirectional move may be causing problems.

Yep, this. Hopefully we'll hear from him soon.

Another problem with Bitcoinica is the constant limit Gox puts on them for coupons in USD. It's only a slight annoyance -- if I want to withdraw money from my Bitcoinica account and put it in Gox, I can exchange it for BTC on Bitcoinica and THEN Bitcoinica will issue me a Gox code for BTC with no problem. It's just kind of a hassle, and kind of curious.

but the BitPay guy was complaining that when he did this he had to pay a 5% premium above what he would have if he could used mtgox w/o the limit.

i find it very odd that we haven't heard from Zhou for a coupla days now. and thats despite alot of negative talk besides mine flying around. normally he is out defending vigorously any and all comments that even hint of problems. is he hunkering down for something we're not aware about? this unidirectional move may be causing problems.

Yep, this. Hopefully we'll hear from him soon.

Another problem with Bitcoinica is the constant limit Gox puts on them for coupons in USD. It's only a slight annoyance -- if I want to withdraw money from my Bitcoinica account and put it in Gox, I can exchange it for BTC on Bitcoinica and THEN Bitcoinica will issue me a Gox code for BTC with no problem. It's just kind of a hassle, and kind of curious.

but the BitPay guy was complaining that when he did this he had to pay a 5% premium above what he would have if he could used mtgox w/o the limit.

i find it very odd that we haven't heard from Zhou for a coupla days now. and thats despite alot of negative talk besides mine flying around. normally he is out defending vigorously any and all comments that even hint of problems. is he hunkering down for something we're not aware about? this unidirectional move may be causing problems.

Yep, this. Hopefully we'll hear from him soon.

Another problem with Bitcoinica is the constant limit Gox puts on them for coupons in USD. It's only a slight annoyance -- if I want to withdraw money from my Bitcoinica account and put it in Gox, I can exchange it for BTC on Bitcoinica and THEN Bitcoinica will issue me a Gox code for BTC with no problem. It's just kind of a hassle, and kind of curious.

but the BitPay guy was complaining that when he did this he had to pay a 5% premium above what he would have if he could used mtgox w/o the limit.

5% is huge. you'd be happy making that in a year for a traditional investment. just b/c you made it and more in a few days doesn't mean you should give it away to Zhou.

I definitely agree, but at this point I have no choice if I want to get some money out. And when I liquidate this long position, when I go to get all my profit out, I'd better be able to do it in USD straight to GOX or Zhoutong is gonna hear an ear full and then some from me.

From the looks of this report, it seems the resistance is weaker than the support.

That still doesn't mean there won't be huge downspikes though. Is this a problem with Gox? I mean, is it caused by Gox allowing people to exchange very large amounts of BTC all at once? Couldn't that problem be solved?

Of course there will be a correction. It happened on the way up to $30, and it will happen this time. There is no escaping the correction. Yes, be very wary of corrections... reduce your leverage and make smaller positions.

But who the hell died and made you the Manipulator? Where are you getting $9-12 from?

I guess I should broaden it to $9.5-$13.5.

Just be aware of the risk. Do you know your Zhoutong price?

Here's some more from S3052's Jan 1 report:

“We keep our view intact that there is a good probability that bitcoin prices will at least correct the down movefrom June 2011 to Fibonacci retracements of 13.5 $ (38.2%), 17 $ (50%), or 20.6 $ (61.8%). Most typical in corrective waves are the 50% and 61.8% retracements. This means that even if bitcoin prices were to fall again in 2012, the current rally can lead to 17 – 20 $!”

“We keep our view intact that there is a good probability that bitcoin prices will at least correct the down movefrom June 2011 to Fibonacci retracements of 13.5 $ (38.2%), 17 $ (50%), or 20.6 $ (61.8%). Most typical in corrective waves are the 50% and 61.8% retracements. This means that even if bitcoin prices were to fall again in 2012, the current rally can lead to 17 – 20 $!”

Sorry for my ignorance, but can anyone decipher this for me? I find it fascinating but don't really understand it.

“We keep our view intact that there is a good probability that bitcoin prices will at least correct the down movefrom June 2011 to Fibonacci retracements of 13.5 $ (38.2%), 17 $ (50%), or 20.6 $ (61.8%). Most typical in corrective waves are the 50% and 61.8% retracements. This means that even if bitcoin prices were to fall again in 2012, the current rally can lead to 17 – 20 $!”

Sorry for my ignorance, but can anyone decipher this for me? I find it fascinating but don't really understand it.

their is no chance in hell its going down, even if it dose... its going to be short lived

You can sell part of your position (assuming it's long) to lower your base price. So if you think a downspike is immanent, you can sell down to a base price that the spike won't affect.Then after the dust settles, buy back in.